3 Stocks for the Nuke Revival

After hibernating for the past few years, the global nuclear industry is
retuning to its former growth pace and the industry leaders are bargains, says
Chris Preston of Daily Profit.

Time heals all wounds. So it is that nuclear energy is back in vogue less
than two years since the Fukushima power-plant disaster.

Japanese prime minister Shinzo Abe loosened the country's post-tsunami stance
against nuclear energy, saying he would be open to having new nuclear reactors
built. The Japanese government had previously vowed to shut down the country's
50 working reactors by 2040.

Other new reactors are being built in places like China, Russia, India, South
Korea ,and the UAE in the coming years. Worldwide, 65 nuclear plants are
currently under construction, and another 160 are in the planning stages. All
told, more reactors are being planned now than before Fukushima.

The recovering post-Fukushima demand for nuclear energy is good news for
uranium prices - and uranium stocks.

Uranium is a metal extracted from the earth's crust and used to produce
nuclear energy. And right now, this bit of rare earth is cheap. At roughly $42
per pound, uranium is about as cheap as it's been in the last three years. With
more nuclear plants coming online, that means global demand for uranium is on
the rise.

Perhaps the best way to play the impending uranium rally is to buy uranium
stocks - one in particular.

Cameco (CCJ)
- a favorite of my colleague Kevin McElroy - is probably the best place to
start. It's one of the largest uranium producers in the world - and it appears
the stock is already starting to rally.

Six weeks ago, Kevin wrote that it was time to buy Cameco, which was selling
near three-year lows at less than $20 a share. Since then, the stock has risen
10.5%.

But that doesn't mean you've missed the boat. Take a look at this two-year
chart of CCJ - and note the drop-off that occurred after the nuclear disaster in
Fukushima in March 2011:

Click
to Enlarge

The stock is still trading for roughly half its pre power-plant spill
price. It's still relatively cheap on a price-to-earnings basis, with a forward
PE of 15.4. As demand for nuclear energy returns, premier uranium producers like
Cameco should benefit.

Other uranium stocks, such as Rio Tinto (RIO)
and Paladin Energy (PALAF),
are also trading at relative discounts. But each comes equipped with a major
caveat.

For Rio Tinto, uranium is just one of the many natural resources the $100
billion company mines, and could still struggle even while its uranium business
flourishes. And Paladin Energy is a penny stock trading on the over-the-counter
market. Those types of stocks are always risky investments.

So if you're looking for the best pure play on the expected uranium boom,
buying CCJ shares is likely the way to go.

Look, no one has forgotten the horrors of what happened at the Fukushima
nuclear plant less than two years ago - nor will they ever. But the initial
hand-wringing has subsided, and people are again realizing that they still need
nuclear power - even in Japan.

With large emerging markets like China, India and Russia ramping up their
nuclear power projects, uranium prices could soon return pre-Fukushima levels.